MUMBAI: Amid the ongoing raging debate on the benefits of demonetisation, there’s been a strong growth in digital payments and transactions in the months since the currency swap was announced on November 8, according to Reserve Bank of India data.

Digital transactions have trebled and quadrupled in volume and value across various modes from wallets to cards and interbank transfers from a year earlier. Card transactions at point of sale (PoS) terminals at merchant locations have surged, reflecting a positive for the economy as more people start using their debit cards for payments rather than for withdrawing cash at ATMs. Debit card transactions rose to more than 1billion in January from 817 million last year. While ATM transactions have remained constant at around 700 million, the incremental growth has been driven mostly by card swipes at PoS terminals.

Transactions on these trebled to 328 million against 109 million in January last year by way of volume. “The acceptance infrastructure of the country has expanded significantly, which allowed card transactions to report the biggest growth post demonetisation,” said Lokvir Kapoor, chief executive officer at PineLabs, one of the biggest deployers of retail terminals. “Further, with so many different initiatives from the government, card transactions at terminals will only grow.”

After note recall, under pressure from the government, banks deployed 1million additional PoS terminals within three months, taking their total number to around 2.52 million.

BHIM, UPI Clocked 6.4 million In MarchBesides plastic, the government has also been promoting smartphone-based transactions through the Unified Payments Interface (UPI) and the Bharat Interface for Money (BHIM). Both use the Immediate Payment Service (IMPS) network of the National Payments Corporation of India. IMPS has seen a 160% jump with 67 million transactions in March against 26 million a year earlier.

According to data released by NPCI, of the total IMPS transactions, BHIM and UPI clocked 6.4 million in March of this year, up from 4.4 million in January and a mere 100,000 in October 2016, just before demonetisation. “While peer-to-peer transactions on UPI have started picking up, we have not seen a paradigm shift on transactions in bank-led UPI apps. Once merchant transactions on UPI go up, that kind of growth will be reported,” said Sujatha Mohan, head of new initiatives at RBL Bank. “The change in the mode of transaction from cash to digital needs a tectonic change and a huge thrust from the banks.”

While installing terminals at shop counters, UPI and BharatQR have been revolutionary initiatives driven by RBI and adopted by the Indian banking system and mobile wallets — which first disrupted the payments space in the country, playing a crucial role. Prepaid Payment Instruments or PPIs, which include wallet services such as those offered by MobiKwik and Oxigen, have shown the highest growth in percentage terms in the first quarter of the calendar year from the same period in 2016.

PPIs reported an average 350% jump in transactions in the January-March period from the year earlier. In March, transactions from PPIs stood at 342 million, up 375% from 72 million a year earlier. “While digital transactions had been consistently growing over the years, demonetisation gave it an additional legup,” said Vineet Singh, chief business officer at MobiKwik.